The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 16.02.2021
After the long weekend in the U.S. normal market operations are being restored today which means we can be seeing some moves in the markets. Bitcoin has inched one step closer to breaking above the $50,000 critical level, since managing to break through that could set the stage for another bullish move to $60,000. EURUSD has come under some cautious pressure as it waits for the economic data out of Europe to decide which way it’s going to go. Gold is also in the same boat as EURUSD as it waits for economic data out of the U.S. to see if the downward pressure will continue despite broad USD weakness.
With that said, let’s find out how the markets are doing on February 16th, 2021.
Another day and another attempt to break above the $50,000 resistance level. Bitcoin moved higher during the evening session, as it managed to break above several resistances that were blocking the way towards the mentioned resistance level, however, once again Bitcoin fell short. The instrument barely managed to touch the $50,000 reaching the $49,980 before correcting lower towards $49,000. The RSI (Relative Strength Index) indicator is printing higher but well below the overbought levels, which might give some needed strength to the upward momentum.
The common currency remains pinned down beneath the 1.2150 resistance level as it seems unable to fully establish the needed bullish momentum to effectively break above. Currently, it would seem that the 50-SMA (Simple Moving Average) on the 4-hour chart has joined forces with the mentioned resistance level and that gives more credibility to the strength of the resistance, making it one tough battle for EURUSD. The RSI is also showing some wear and tear as it’s unable to move above the 63 level indicating that the bullish momentum is fading.
After Gold’s inability to break above the $1,850 resistance level, it proceeded to fall quite far reaching the $1,815 support level where it consolidated the losses it made. The mentioned support level is keeping things in check for the time being, but how long will that last, isn’t quite clear. The 50-, 100-, and 200-SMA on the 4-hour chart are all showing more downward is waiting for the precious metal if it’s unable to properly rally from this point. The RSI is also showing some increase in downward pressure, however, that will only fully manifest if the 40-level on the indicator is broken.
What’s the strategy you’re going to use when it comes to trading these markets? Will the markets be faced with a reversal of the current trend? Or will there be a continuation of the current trend?
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Bitcoin Draws Closer to $50,000
Bitcoin is trading slightly below $49,000 after recovery from the recent dip to $46,000. Over the weekend, the flagship cryptocurrency closed in on $50,000 but failed to swing above the critical level. The Bull cycle is still intact, and a break above $50,000 will mark its next phase to price levels around $60,000. The 4-hour chart shows Bitcoin trading within an ascending parallel channel. Marginally below the prevailing price action, BTC rests on the 50-SMA. Holding above this moving average has been very instrumental in preventing the pioneer cryptocurrency from dropping further.
Simultaneously, the support allows the Bulls to focus on higher price levels. For now, the least resistance path is upwards. Besides, the bullish outlook is likely to become more vivid if the Bitcoin steps above the ascending parallel channel’s middle boundary. Continued price action above $50,000 will leave bulls with open-air to explore towards $60,000.
Traders must pay close attention to the RSI. Currently, the momentum indicator has settled above the 60-level, suggesting that Bitcoin is in the hands of the bulls. On the other hand, Bitcoin may fail or delay the breakout if Bulls cannot break above the channel’s middle hurdle. Selling pressure would increase as Bulls get exhausted. A break under the 50-SMA will open the door to losses heading towards $46,000 and $44,000, respectively.
Current Market Sentiment:Bullish.
EURUSD Eyes Economic Data
EUR/USD challenges a key hurdle and could soon chart a breakout, as risk remains bid on coronavirus vaccine optimism. The pair found buyers below 1.2130 in Asia and tested the crucial resistance at 1.2150 soon before press time. That level proved a tough nut to crack on Feb. 11 and seems to remain just as tough. The anti-risk dollar is under pressure, with the Asian stocks and the futures tied to the S&P 500 cheering the UK's vaccine rollout success and Monday's rally in FTSE 100, UK's benchmark equity index.
The buoyant risk sentiment could also be attributed to the rally in oil and industrial metals such as copper. A continued risk-on during the European trading hours could end up pushing EUR/USD well above 1.2150. However, the sustainability of the gains depends on Eurozone and German data scheduled for release later today.
A big miss on expectations could draw offers for the single currency. More substantial selling pressure may hit the market if the forward-looking German Zew Survey indices for the Current Situation and Economic Sentiment paint a gloomy picture of the Eurozone's largest economy. A continued rise in the US Treasury yields may weigh over the equity markets and boost demand for dollars, putting brakes on EUR/USD's rally.
Current Market Sentiment: Cautious / Wait-And-See Approach.
Gold In Wait-And-See Mode
Gold has dropped on the first trading day of the week, despite broad weakness seen in the US dollar and strength seen in other precious metals, including silver, platinum and palladium. XAU/USD attempted to stage a rebound into the upper $1820s during Asia Pacific trade, but reversed during European trading hours and has since dropped back under the $1820 mark as Tuesday Asia Pacific trade gets underway.
The yellow metal also remains undermined by higher premium drawn by the platinum group metals (PGM) amid upbeat demand prospects. Attention turns towards the U.S. Retail Sales and FOMC minutes due later this week for fresh directives. In the meantime, the broader market sentiment will dominate as full markets return this Tuesday.
Technical indicators are showing that Gold is attempting a tepid recovery towards $1,829, however it’s currently battling against the 50-SMA on the 4-hour chart at $1,825. A series of minor resistance levels are aligned around $1834, which could hinder the recovery mode, as the XAU bulls target $1837. To the downside, the bulls are defending strong support at $1815, which is the level to beat for Gold Bears.
Current Market Sentiment: Wait-And-See Approach .
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